My NARUC Takeaway on Broadband

What kind of action should state policymakers take in order to encourage investment in deploying broadband or developing edge services?  This is the policy question I expected to see addressed at the NARUC Summer meetings but instead I heard more of the same silo approach to regulation that we have been hearing on the national level.

While commissioners, panelists, and other participants acknowledged the convergence of video distribution and broadband access during a number of sessions discussing broadband and net neutrality, the conversations continued to harp on competition among platforms and whether broadband providers such as AT&T, Comcast, and Verizon were getting too big for their market britches.

It doesn’t help that on the national level the conversation on broadband is still being summarized as a struggle between the mythical David and Goliath of content providers and broadband access firms.  Today’s hearing before the U.S. Senate Committee on Commerce, Science, and Transportation provided another example of focusing on the silos where senators voiced their concerns that increased consolidation of media and broadband providers would silence the voices of smaller content providers.  Policymakers and elected officials with a progressive bent are all but saying that competition is something that is best created by policy.

We have seen that script played out before back in the 1990s when upstart local and long distance telecommunications providers hoped to break into the telecommunications markets by reselling services provided by facilities-based local and long distance carriers.  The Davids put away their slingshots and decided to hang on to Goliath’s spear.

Unfortunately for the Davids, and with a touch of irony, the 1996 amendment to the Communications Act of 1934 helped lead to their quick demise as the strongest of the Davids, the cable companies, were able to leverage their own facilities to bundle services and in a ten-year time span provide long distance, local service, and video distribution.  Technology and innovation won.  The promise of better value of service attracted consumers to the cable companies and the incumbent phone companies had to step up their game.  As Comcast’s David Cohen said in today’s hearing, when we innovate, everyone else innovates, too.

If history of communications on the state and national level provides any lessons, it’s that encouraging technological know how and abandoning short-term fixes like unbundled network elements and issuing certificates of service to a couple telephone marketers and aggregators is the best approach to getting quality services to consumers.

Broadband providers and investors should not overlook that the net neutrality narrative has been festering on the local level for a decade; a virus ready to go full blown.  I first heard about net neutrality as an analyst in Fairfax County’s cable division when I received a complaint from a consumer that Comcast was blocking access to his preferred e-mail provider.  I later determined that the problem was due to a server issue with the consumer’s preferred e-mail provider.

Broadband providers should not assume that local and state regulators won’t stay abreast of whatever authority they can exercise under section 706 of the Telecommunications Act.  A few commissioners may be willing to express their need to promote consumer protections using this section of the Act making compliance and regulatory affairs a more expensive activity.